11th Mar 2008 07:00
Newcourt Group plc Ticker: NEW.I 39% growth in 2007 trading profit Newcourt Group plc ('Newcourt' or the 'Group' or the 'Company'), a leading,Irish based, support services group, today announced its results for the yearended 31 December 2007. \* T2007 Financial Highlights Year ended Year ended 31 December 2007 Change 31 December 2006 EUR '000 % EUR '000 Unaudited Audited Revenue 165,925 +42% 116,464 Gross profit 30,255 +36% 22,170 Trading profit^ 15,545 +39% 11,175 Profit before tax 9,286 +21% 7,662 Adjusted EBITDA* 15,380 +39% 11,046 cents centsAdjusted diluted earnings per share 11.71 +17% 10.01\* T ^trading profit represents divisional profit before group overheads, shareoption and warrant costs, the amortisation of intangible assets and tender costs * adjusted for share option and warrant costs, the amortisation of intangibleassets and tender costs 2007 Highlights -- Revenue increased by EUR 49.46m (42%) on 2006 EUR 4.14m (8%) relates to contributions from 2007 acquisitions; EUR 45.3m (92%) represents organic growth. -- Trading profit increased by EUR 4.37m (39%) on 2006 EUR 411k (9.5%) relates to contributions from 2007 acquisitions; EUR 3.95m (90.5%) represents organic growth. The increase in trading profit reflects growth within Newcourt's three primary operating divisions during 2007. Support Services trading profit increased 33%, Student accommodation trading profit increased 61% and Recruitment and Aviation Outsourcing increased 28% year-on-year. -- Newcourt continued to focus on growth by acquisition during 2007, completing the following acquisitions during the period. Each of these acquisitions is integrating well and performing in line with expectations CCM Recruitment Lenmac Mechanical Services BDS Security Management Performance Review & Outlook Ted O'Neill, Newcourt's Chief Executive Officer, commented "2007 was a year ofsignificant progress for Newcourt. The business delivered strong organic growthand the investment in acquisitions during 2006 made a significant contributionto the Group's performance. We expect 2008 to be a year of further progress andgrowth" Newcourt | Contacts \* TTed O'Neill / Damien Murray Mark Kenny/Jonathan NeilanNewcourt Group K Capital Source Mobile: +353 86 8214467 / +353 86 1730417 Tel: +353 1 631 5500Email:[email protected] Email: [email protected]@Newcourtgroup.com--------------------------------------------------- ------------------------------------------\* T Chairman's Statement I am pleased to present the results of Newcourt Group Plc for the year ended 31December 2007. Results Revenue in 2007 of EUR 165.9m compares to EUR 116.5m for the previous year. Thisrepresents 42% growth and reflects a combination of both acquisition and organicgrowth. Pre - tax profits for the group for 2007 were EUR 9.3m after charging one-offcosts of EUR 928k and intangible asset amortisation of EUR 1.5m. One-off costsrelate to tendering for a significant government outsourcing contract and costsassociated with a major corporate transaction with which Newcourt did notproceed. This represents a 21% increase on pre - tax profit of EUR 7.6m in theyear to 31 December 2006. Total adjusted earnings per share was 11.71 cents, compared to 10.01 cents in2006. Net debt, including deferred payments on acquisitions at the year-end roseto EUR 40.8m from EUR 27.1m at the end of 2006 largely reflecting the costs ofacquisitions and student accommodation developments, less additional fundsgenerated during the year. Dividends The board is not recommending the payment of a dividend. Corporate Governance The Board and Management of Newcourt are committed to achieving the higheststandards of Corporate Governance and Ethical Business Conduct. Outlook Newcourt continued to significantly grow and develop its business during 2007both organically and through acquisition. The Board is pleased with the Group'sfinancial performance for 2007 and the trading performance in the first monthsof 2008 is encouraging. The Group continues to strengthen its management team across its variousoperations to help drive further value from its businesses. Finally, on behalf of the board, I would like to thank all of the Management andStaff of Newcourt for their commitment and contribution during 2007. James OsborneChairmanMarch 2008 Chief Executive's Review 2007 was another positive year of growth and development for Newcourt. Grouprevenue and profit benefited from very strong organic growth and significantcontributions from acquisitions completed in 2006. Operations For the purpose of financial reporting, our business is organised under threeprincipal divisions: 1. Support Services; 2. Student Accommodation; and 3. Recruitment and Aviation Outsourcing. During the year the number of people employed in the Group increased by 1,072 to3,675. This is comprised of 3,468 in Support Services 18 in StudentAccommodation, 185 in Recruitment and Aviation Outsourcing and 4 at Group level. Support Services Revenue in this division for the full year of EUR 109.2m represents an increaseof 31% on 2006. Trading profit grew by 33% to EUR 6.4m reflecting significantorganic growth and a strong contribution from the businesses acquired during2007. The businesses within this division include: -- Manguarding Security, Electronic Security, Monitoring and Related Services. -- Health and Safety Training and Consultancy -- Facilities Management -- Business Process Outsourcing and Contact Centre Developments There were a number of significant developments in this division during 2007including: -- The acquisition of the established, mid-west of Ireland based, facilities management company, Lenmac Mechanical Services Limited in October. -- The takeover of the business of BDS Security in November which increases annualised security revenues by approx EUR 14m. Student Accommodation Revenue in this division for the full year of EUR 19.8m represents an increaseof 316% on 2006. Trading profit grew by 61% to EUR 4.8m reflecting significantorganic growth. The businesses within this division include: -- Student accommodation management; and, -- Student accommodation development Developments -- Following the year end Newcourt acquired 100% of the issued share capital of BHE Limited, a UK based developer, facilitator and provider of student accommodation. Recruitment and Aviation Outsourcing Revenue in this division for the full year of EUR 36.9m represents an increaseof 29% on 2006. Trading profit grew by 28% to EUR 4.3m reflecting very strong organic growth andthe continuing development of the division's business offerings. The businesses within this division include: -- Mid-Market Permanent and Temporary Recruitment -- Contract Recruitment - Pharmaceutical Industry -- Executive Search and Selection -- Senior Sales Marketing Recruitment -- Contract Recruitment - Aviation -- Pilot Training -- Health Care Recruitment Developments During 2007, the Group acquired CCM, a Dublin based specialist in internationalhealth care recruitment. CCM is making a strong contribution to the Group'sbusiness offering and profitability. Newcourt is committed to, and investing in, its pilot training and aviationcontract recruitment business. This is an attractive business with strong growthprospects. Newcourt is currently developing a UK operating base and managementteam to further grow these businesses in 2008. Principal Risks and Uncertainties The Group is exposed to the economies of the Republic of Ireland and the UnitedKingdom. The Directors have no reason to believe that these economies will notcontinue to perform in the medium term. The Directors recognise that management and staff are a key ingredient in thesuccess of the business and, consequently, the Group's HR function is gearedtowards the retention and motivation of key personnel. The Group's financial instruments comprise borrowing , cash and various items ,such as trade debtors , trade creditors etc , that arise directly from itsoperations. The purpose of such instruments is to manage the interest rate andcurrency risks arising from the Group's operations and its source of finance. Itis not Group policy to trade in financial instruments. The main risks arising from the Group's financial instruments are interest rate,foreign exchange and liquidity risks. The Group's policies for managing each ofthese risks are summarised below: -- Interest rate risk The Group finances its operations through a mixture of retained profits, bankand other borrowings, at both fixed and variable rates of interest, and workingcapital. The Group determines the level of borrowings at fixed rates of interesthaving regard to current market rates and expected future trends. -- Foreign exchange risk The Group is exposed to foreign exchange risk in relation to its activities inthe United Kingdom. To balance this exposure the Group has secured anappropriate level of debt in the same currency. -- Liquidity risk The Group's policy is that, in order to ensure continuity of funding, asignificant portion of its borrowings should mature after more than one year.The Group achieves short-term flexibility by means of invoice finance andoverdraft facilities. Performance Review & Outlook 2007 has been a year of significant progress for Newcourt. The businessdelivered significant organic growth and the investment in acquisitions during2006 made a strong contribution to the growth of the business in 2007. Looking forward, Newcourt recognises the broader market concerns that growth inthe economies in which we operate will slow. However, Newcourt expects 2008 tobe a year of further progress and growth. The primary focus for growth in 2008 and beyond is the further development ofthe Support Services Business and the Group's Student Accommodation and Aviationbusinesses. I would like to take this opportunity to thank our Chairman and ournon-executive directors for their help, advice and assistance over the pastyear. I would also like to thank my executive director colleagues, the directorsof our trading companies and the management and staff throughout the Group fortheir contribution to the successful development of Newcourt. Ted O'NeillChief ExecutiveMarch 2008. \* TGroup Income Statementfor the year ended 31 December 2007 Year ended 31 December 2006 - IFRS Year ended 31 December 2007 Restated Before Amortisation Before Amortisation amortisation and amortisation and and other other and other other costs costs Total costs costs Total EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 Unaudited AuditedRevenue 165,925 - 165,925 116,464 - 116,464 Cost of sales (135,670) - (135,670) (94,294) - (94,294) ---------------- ------------- ---------------- ------------ ------------ -------------Gross profit 30,255 - 30,255 22,170 22,170 Administration expenses (14,710) - (14,710) (10,995) - (10,995) ---------------- ------------- ---------------- ------------ ------------ ------------- Trading profit 15,545 - 15,545 11,175 - 11,175 Tender and other costs - (928) (928) - (477) (477)Share options and warrants - (302) (302) - (211) (211)Group overhead - (1,507) (1,507) - (1,220) (1,220)Amortisation of intangible assets - (1,522) (1,522) - (572) (572) ---------------- ------------- ---------------- ------------ ------------ ------------- Operating profit 15,545 (4,259) 11,286 11,175 (2,480) 8,695 Finance costs (2,081) (1,089)Finance income 81 56 ---------------- ------------- Profit before tax 9,286 7,662 Income tax expense (1,202) (948) ---------------- ------------- Profit after tax for the year attributable to equity shareholders 8,084 6,714 ================ ============= Basic earnings per share 9.08 8.70 ---------------- ------------- Diluted earnings per share 8.99 8.48 ---------------- -------------\* T \* TGroup Balance Sheetat 31 December 2007 31 December 31 December 2006 - 2007 restated EUR '000 EUR '000 Unaudited AuditedAssetsNon current assetsProperty, plant and equipment 6,070 5,424Investment property 864 800Investment in joint venture undertaking - -Goodwill 71,126 64,698Intangible assets 5,081 3,408 ------------------ ------------------Total non-current assets 83,141 74,330 ------------------ ------------------Current assetsInventories 27,575 6,523Trade and other receivables 39,866 29,455Corporation tax refundable - 5Cash and cash equivalents 10,772 7,805 ------------------ ------------------Total current assets 78,213 43,788 ------------------ ------------------Total assets 161,354 118,118 ------------------ ------------------EquityShare capital 23,191 21,733Share premium 33,052 27,602Share options / warrants reserve 285 211Foreign exchange reserve (457) (96)Retained earnings 15,141 6,828 ------------------ ------------------Total equity 71,212 56,278 ------------------ ------------------LiabilitiesNon current liabilitiesFinancial liabilities 18,721 13,166Trade and other payables 2,516 2,640Deferred consideration on acquisitions 3,007 4,426Deferred tax liabilities 584 491 ------------------ ------------------Total non-current liabilities 24,828 20,723 ------------------ ------------------Current liabilitiesFinancial liabilities 25,192 12,066Trade and other payables 34,751 23,809Deferred consideration on acquisitions 4,987 5,242Corporation tax payable 384 - ------------------ ------------------Total current liabilities 65,314 41,117 ------------------ ------------------Total liabilities 90,142 61,840 ------------------ ------------------Total equity and liabilities 161,354 118,118 ------------------ ------------------\* T \* TGroup Cash Flow Statementfor the year ended 31 December 2007 31 December 31 December 2007 2006 - restated EUR '000 EUR '000 Unaudited AuditedCash flows from operating activitiesProfit for the financial year 8,084 6,714Adjustments for:Depreciation 1,342 1,091Amortisation of intangible assets 1,522 572Share options and warrants 302 211(Profit) loss on sale of property, plant and equipment (9) 12Gain on investment property (64) -Loss on sale and purchase of minority interest 365 -Loss on disposal of intangible assets - 133Finance income (81) (56)Finance cost 2,081 1,089Income tax expense 1,202 948 ----------------- ------------------ 14,744 10,714Movement in inventories (8,812) (4,828)Movement in trade and other receivables (9,213) (5,660)Movement in trade and other payables 7,544 7,467 ----------------- ------------------Cash generated from operations 4,263 7,693Interest paid (2,343) (1,053)Interest element of finance lease payments (34) (36)Income tax paid (995) (1,426) ----------------- ------------------Net cash flows from operating activities 891 5,178 ----------------- ------------------Cash flows from investing activitiesInterest received 81 56Proceeds from sale of property, plant and equipment 103 368Proceeds from sale of minority interest 1,460 -Deferred consideration paid (4,466) (483)Acquisition of subsidiaries, net of cash acquired (5,914) (31,632)Acquisition of minority interest (1,825) -Acquisition of property, plant and equipment (1,266) (1,146) ----------------- ------------------Net cash used in investing activities (11,827) (32,837) ----------------- ------------------Cash flows from financing activitiesProceeds from issue of share capital 1,877 17,414Drawdown of loans 13,496 9,822Repayment of loans (4,479) -Capital element of payment of finance lease liabilities (42) (180)Loan to joint venture (591) (680) ----------------- ------------------Net cash flows from (used in) financing activities 10,261 26,376 ----------------- ------------------Net decrease in cash and cash equivalents (675) (1,283)Cash and cash equivalents at beginning of year 3,536 4,830Effect of exchange rate fluctuations on cash held 70 (11) ----------------- ------------------Cash and cash equivalents at end of year 2,931 3,536 ================= ==================\* T \* TGroup Statement of Recognised Income and Expensefor the year ended 31 December 2007 31 December 31 December 2007 2006 - restated EUR '000 EUR '000 Unaudited Audited Items of income / (expense) recognised directly within equity: Foreign currency translation differences for foreign operations (361) (96) Profit for the year attributable to equity shareholders 8,084 6,714 ---------------- ---------------- Total recognised income and expense for the year attributable to equity shareholders 7,723 6,618 ================ ================\* T Notes to the year end resultsfor the year ended 31 December 2007 1. International Financial Reporting Standards Basis of Preparation The financial information presented in this preliminary results announcement hasbeen prepared in accordance with International Financial Reporting Standards(IFRS), IFRIC interpretations issued by the International Accounting StandardsBoard (IASB) and subsequently endorsed by the European Union (EU), referred toas EU IFRS, and the Companies Acts 1963 to 2006, applicable to companiesreporting under IFRS. Statutory accounts The accounts in this preliminary announcement are not the statutory accounts ofthe Company, a copy of which is required to be annexed to the Company's annualreturn to the Companies Registration Office. A copy of the statutory accounts inrespect of the year ended 31 December 2007 will be annexed to the Company'sannual return for 2007. The auditors of the Company have made a report withoutany qualification on their audit, on the statutory accounts of the Company inrespect of the year ended 31 December 2006 on 30 April 2007. A copy of thestatutory accounts of the Company in respect of the year ended 31 December 2006has been annexed to the Company's annual return for 2006 to the CompaniesRegistration Office. 2. Extracts from segmental reporting \* T 31 December 31 December 2006 - 2007 restated EUR '000 EUR '000 Unaudited Audited Revenue by segmentSupport services 109,215 83,183Student accommodation 19,775 4,748Recruitment and aviation outsourcing 36,935 28,533 ------------- ------------- 165,925 116,464 ============= ============= Trading profit by segmentSupport services 6,438 4,847Student accommodation 4,841 3,006Recruitment and aviation outsourcing 4,266 3,322 ------------- ------------- 15,545 11,175 ------------- ------------- Amortisation of intangible assets & other costs (4,259) (2,480) ------------- -------------Operating profit 11,286 8,695 ============= =============\* T 3. Tender and other costs \* T 31 December 31 December 2006 - 2007 restated EUR '000 EUR '000 Unaudited Audited Once off tender costs 679 477Cancelled acquisition costs 249 - ------------- ------------- 928 477 ============= ============= Once off tender costs comprise of costs incurred in preparing for the submission of a significant outsourcing contract.\* T 4. Earnings per Share and Adjusted Earnings per Share \* T 31 December 31 December 2006 - 2007 restated EUR '000 EUR '000 Unaudited Audited Earnings as reported 8,084 6,714Adjustment for once off tender and other costs 928 477Adjustment for share options and warrants 302 211Adjustment for intangible asset amortisation 1,522 572Tax effect of adjustments (306) (47) --------------- -------------Earnings as adjusted 10,530 7,928 =============== ============= Weighted average number of shares 89,081,175 77,190,601 Dilutive potential shares:Employee warrants to purchase shares - 988,210Employee share options 851,564 1,031,850 Diluted weighted average number of shares 89,932,739 79,210,661 cent centBasic earnings per shareBasic earnings per share 9.08 8.70Adjusted basic earnings per share 11.82* 10.27 Diluted earnings per shareDiluted earnings per share 8.99 8.48Adjusted diluted earnings per share 11.71* 10.01\* T Basic earnings per share is calculated by dividing the profit attributable toequity shareholders of the company by the weighted average number of shares inissue during the period, excluding share options and warrants. Diluted earnings per share is calculated by adjusting for the weighted averagenumber of shares outstanding to assume conversion of all dilutive potentialordinary shares. Options and warrants granted under Employee Share OptionSchemes dilute the earnings per share by increasing the weighted average numberof shares without changing the net profit. * adjusted to exclude share options and warrant costs, amortisation ofintangible assets and tender and other costs. 5. Analysis of net debt \* T 31 December 31 December 2007 2006 - restated EUR '000 EUR '000 Unaudited AuditedNon-current assets:Cash and cash equivalents - - ------------- ------------------ Current assets:Cash and cash equivalents 10,772 7,805 ------------- ------------------ Non-current liabilities:Borrowings and lease liabilities* (18,721) (13,166) ------------- ------------------ (18,721) (13,166) ------------- ------------------Current liabilitiesBorrowings and lease liabilities* (25,192) (12,066) ------------- ------------------ (25,192) (12,066) ------------- ------------------ Net debt (33,141) (17,427) ============= ==================\* T * includes an amount of EUR 12.7m (2006:EUR 4.48m) relating to studentaccommodation and healthcare developments. These assets are secured on thedevelopments to which they relate. Copyright Business Wire 2008Related Shares:
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